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SSE boosts earnings outlook as higher prices offset lower renewables output

Activist investor Elliott Investment Management has been calling for company to split renewables and grid businesses

SSE has revamped 2030 goals, setting up new emissions reductions and renewable energy targets.

Tue Feb 8 2022 - 08:14

UK electricity producer SSE boosted its earnings outlook for the year as higher power prices compensated for lower output from its renewables business.

The company now expects earnings per share of 90 pence for the year ending March 31st, 8.4 per cent higher than a previous forecast, it said in a statement Tuesday. The company also revamped 2030 goals, setting up new emissions reductions and renewable energy targets.

SSE is fending off activist investor Elliott Investment Management, which has been calling for the company to split its renewables and grid businesses. In December, SSE hit back at the activist investor saying that the board was against hiving off parts of the utility.

Gas and electricity prices have tripled over the past year as Europe faces energy shortages. Higher power prices helped boost SSE earnings, with good performance from thermal and hydro power units more than offsetting the decline in renewables generation, the company said.

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Output from SSE’s renewable assets was 19 per cent lower than expected in the nine months to December due to “exceptionally still and dry” conditions. Output from its gas-fired stations was 14 per cent lower than the year before while power prices are 200 per cent higher. SSE is due to report its full year results on May 25th.

The company also set out goals to 2030 to reduce Scope 1 carbon intensity by 80 per cent, build a renewable energy portfolio to generate at least 50 terawatt-hours and connect up 2 million electric vehicles and 1 million heat pumps on its transmission and distribution networks. – Bloomberg

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